EDITORIAL: 31

That’s the number of countries on this planet, out of 180 surveyed by Transparency International, which just published its most recent results, that are more corrupt than Vladimir Putin’s Russia.

31.

It’s a truly staggering number. It means that 83% of the world’s nations are less corrupt than Putin’s Russia. It means that Russia, which makes pretensions to international leadership and membership on the G-8 panel, ranks in the bottom quintile of all world countries, including the most backwards and least-developed African banana republics. It means that, in terms of civilized behavior, Russia is a wasteland.

31.

Georgia, relentlessly castigated by Russians as being totally corrupt, ranks #66 on the list. Russia is #146, tied with Ukraine and right behind Azerbaijan. Pakistan is significantly less corrupt than Russia. So are Uganda and Nigeria. The United States is #19.

Consider an ordinary example — the price of housing. The standard rule is that the price per square meter for an apartment equals one or two times the amount of an average salary. With salaries averaging $500 to $1,000 per month, apartments should cost anywhere from $500 to $1,000 per square meter. In fact, they cost an average of $5,000 per square meter these days. That is five to 10 times higher than they should cost.

It is obvious that the price of apartments in Moscow reflects the amount that builders must pay in bribes to the officials. Contractors must fork over enormous sums simply to obtain the necessary permits, and those costs are reflected in the selling price. Also, the officials receiving the bribes do not invest their income in their businesses (their chief “business” is extorting bribes). Instead, they go out and buy more apartments, only fueling the cycle of ever-increasing prices.

Let’s look at another example — airplane tickets. I recently paid $500 for a five-hour flight from Moscow to Madrid in economy class on Iberia Airlines. Before that, I paid about $950 for a three-hour flight from Novosibirsk to Chita. The math is simple: domestic flights cost two to three times what comparable flights abroad cost.

And what about medicine? A pharmaceutical drug that I buy in Europe for 50 euros costs exactly twice that amount in Russia.

Latynina observes: “Bribery accounts for at least 50 percent — and more likely 70 to 80 percent — of GDP. That cost rivals the 70 percent to 80 percent of GDP that the defense budget accounted for in the Soviet Union of the 1980s.”

No nation can survive fundamental corruption this epic. The USSR could not, and neither can Russia. But the difference is that today the people of Russia are directly and immediately to blame, and cannot claim they are victims of the horrible disaster about to befall them.

23 responses to “EDITORIAL: 31”

Wow! Yulia Latinyna rubbing their nose in it. That should be Moscal’s proper toilet training. Nothing helps, save emigration abroad among humans. What, no more toilet paper in the restaurants? See Putin’s man Medvedyob.

Bribery accounts for at least 50 percent — and more likely 70 to 80 percent — of GDP. That cost rivals the 70 percent to 80 percent of GDP that the defense budget accounted for in the Soviet Union of the 1980s.

More stupidity from treasonous hack Latynina. Bribes are transfer payments and thus cannot make up any amount of GDP. (And for the record, the military share of Soviet GDP was around 30% in the 1980’s).

Similarly, TI has a number of methodological problems which make its rankings highly unreliable.

Treasonous? Those who support the Putin regime are the only traitors to Russia’s future. Those who challenge him are heroes. In Soviet times, Solzhenitsyn was a “treasonous hack.” In Tsar times, Pushkin was. So Yulia is in very good company.

Your insipid, utterly stupid nonsense is totally at odds with Russia’s TI ranking. Given that 80% of world nations are less corrupt, it’s obvious that at least 50% of Russia’s economy is tied to corruption, probably much more, just as she says.

“Methodological problems”? What serious scholar has questioned the reliability of TI data? It’s a HIGHLY respected international unbiased source, relied upon by the most authoritative governmental and media sources on the planet. You offer ZERO proof of your bizarre, libelous gibberish and thus look like a witless hypocrite.

Mind telling us a study that shows Russia doing well whose “methodology” you also question? Can’t? Didn’t think so.

The Corruption Perceptions Index has drawn increasing criticism in the decade since its launch, leading to calls for the index to be abandoned. [6][7][8] This criticism has been directed at the quality of the Index itself, and the lack of actionable insights created from a simple country ranking. [9][10] Because corruption is willfully hidden, it is impossible to measure directly; instead proxies for corruption are used. The CPI uses an eclectic mix of third-party surveys to sample public perceptions of corruption through a variety of questions, ranging from “Do you trust the government?” to “Is corruption a big problem in your country?”

The use of third-party survey data is a source of criticism. The data can vary widely in methodology and completeness from country to country. The methodology of the Index itself changes from year to year, thus making even basic better-or-worse comparisons difficult. Media outlets, meanwhile, frequently use the raw numbers as a yardstick for government performance, without clarifying what the numbers mean.

The lack of standardization and precision in these surveys is cause for concern. The authors of the CPI argue that averaging enough survey data will solve this; others argue that aggregating imprecise data only masks these flaws without addressing them. [11] In one case, a local Transparency International chapter disowned the index results after a change in methodology caused a country’s scores to increase—media reported it as an “improvement”. [12] Other critics point out that definitional problems with the term “corruption” makes the tool problematic for social science.

It’s YOU who doesn’t understand GDP, moron. The selling price of goods and services determines their “value” for GDP purposes. In Russia, fraud vastly inflates that price, making it seem Russia produces far more than it actually does.

Meanwhile, YOU totally ignore Latynina’s main point, namely that corruption forces Russians to pay far more for products than other countries. This pathetic attempt to distract is neo-Soviet in character and stopped working decades ago. Totally laughable.

KGB comrade, “Bribery accounts for at least 50 percent” means that estimated value of money paid in bribes is half of Russia’s GDP.

You know how people in Russia usually just give 10 roubles (or whatever the amount is these days) to conductor in trains instead of buying the ticket and the conductor just puts it in in his own pocket. You won’t see that transaction in GDP. That is until the conductor goes to a shop and buys something.

I don’t see why bribery does contribute to GDP calculations. If that expense gets passed on to the consumer of the product or certain service (as the apartment prices demonstrate) then the cost contributes to the GDP. What am I missing? The fact that it is a transfer payment does not mean it is not affecting prices. I’m not certain but I suspect that even the train ticket skipping is recorded in GDP if it requires government spending to make up the lost revenue or some other mechanism. And the observation about the conductor’s sandwich is relevant. All the dirty income spent on most things should be treated as bribery’s contribution to GDP.

You are missing this. The GDP is a sum of all goods and services produced. Bribery obviously produces neither goods nor services, but makes them more expensive. When prices rise as a result with no additional products or services being generated, it creates inflationary pressures

Bribery just means that (real) consumption will shift from the bribe-give to the bribe-taker. Making stuff more expensive will only increase the nominal GDP denominated in that country’s own currency. Real GDP will remain unchanged.

LA RUSSOPHOBE RESPONDS:

You are an ABSOLUTE BRAYING JACKASS.

Latynina’s point is ABSOLUTELY VALID. The price of things in Russia is inflated by corruption, which means the value of its GDP is VASTLY OVERSTATED because it is not real “value” but rather simply fraud.

That you, and obscue and anonymous nobody, would so arrogantly imagine he better understands economics than a published columnist only goes to prove what a total zero you really are.

Not only do you fail to link to ANY economist saying that bribery is irrelevant to the value of GDP, you seem to ignore the fact that bribery is WASTE. If the bribes had not been paid, they would have been used TO PRODUCE MORE GOODS AND SERVICES THAN WERE ACTUALLY PRODUCED, you hopeless ape.

On top of that, the only way to assess the value of goods and services is PRICES. If you think the value of a Russian “car” and a German “car” is the same, your brain is nothing but fungus and reefer smoke.

And on top of THAT, you cretin, the TI methodology IS THE SAME FOR EVERY COUNTRY. So even if it has flaws, all countries are burdened equally by them, and Russia comes out ON THE BOTTOM.

Since you can’t respond with substance, do you realize you’ve confirmed you’re a braying jackass? There was nothing WHATOSEVER of substance in your deleted comment for us to respond to, moron, and we were not trying to do so.

I can imagine few examples when bribery actually does produce services. Like when a traffic policeman actually bothers to do his job in order to get extra income.

And when bribery is making prices increase, it means it does contribute to the GDP, because that’s what GDP is all about. You buy iron and make steel out of it and sell it to a factory. You added value to the product, but it doesn’t show in the GDP until the product is sold to the consumers or gets exported. Bribery is not nearly as effective free and law-based ecomic system, but since bribery is so commonly used in Russia in every day transactions, most of it ends up in legal transactions and thus in GDP.

They build a block of flats the customer buys a shell that has no plumbing, no lighting, no doors or windows, no decoration all this work has to be completed by the new owner there are no grants on offer.

The Russians then announce to the world look we are helping the poor, what a bunch of “A holes”.

While teaching English in Russia I had an adult student who was a project manager for one of the big St. Petersburg construction companies. Because one needs something like 572 different permits before sticking a shovel in the ground, he explained how it was just easier to start building and when -not if- the inspectors showed up to just pay them off. The cost of bribes – an average of 30% of the total construction cost- was built right into the budget.

5,000$ a square meter and all you get is a concrete shell in a building that was poorly constructed with corners cut at every opportunity. They start falling apart inside of a year.

Rather than focussing on real crime such as corruption, the Russian police are being ordered to stamp out perfectly legal protests.

Internal Memo Indicts Police Of Illegal Detentions

“A high-level police memo ordering officers to disrupt a series of lawful protests has been obtained by opposition activists in Moscow, targeted for their calls to release arrested political activist Eduard Limonov.

Denis Bilunov, leader of the Solidarity opposition movement and among those detained, said activists were able to photograph a memo from Colonel Timur Valiulin of the Russian Interior Ministry’s notorious Center for Extremism Prevention (Center “E”) to Public Safety Police General Vyacheslav Kozlov, discussing “the necessity to take measures to disrupt the series of solo protests of the Solidarity movement” in support of Limonov. Limonov, a leader of the Other Russia coalition and the banned National Bolshevik party, was sentenced to ten days of administrative arrest on November 12 for “insubordination to a police officer” and participation in an “unsanctioned rally” on October 31.

Activists managed to photograph the document with a camera phone after an officer accidentally left it in view. Solidarity leaders intend to use it as evidence in a court case that they hope would close Center “E,” criticized by Amnesty International for stifling dissent from journalists and activists and for torturing criminal suspects.

According to Solidarity member Ilya Yashin, who published the document on his blog, “The published paper is more than sufficient as a minimum for the prosecutorial review of the activities of this structure, consistently and blatantly in violation of the Constitution and the law.”

Bilunov and seven other activists were detained on November 16 when their solo protests, which do not require sanction from authorities, were approached by men posing as activists wanting to join them. After the protests ceased to appear solo, police arrested all participants.

Boris Nemtsov, a former Deputy Prime Minister and co-founder of the opposition party Union of Right Forces, was among those detained. He calls the men, believed to be undercover police, “simple provocateurs.” He explained his support for Limonov on his blog:

“Many people ask me, how you, a political antipode of Eduard Limonov, defend him. The answer is that Limonov, organizing regular protests on the 31st date of every month, defends our and your right to rallies, processions, [and] demonstrations, as provided by the 31st article of the Constitution of the Russian Federation. Putin’s regime is taking this right away from you systematically, absolutely illegally and cowardly.”

Nemtsov further writes: “The arrest of Limonov for 10 days does not have any relationship to the law. He did not, naturally, show any insubordination to the police, first of all because he is experienced, and secondly, he is no longer a young man.”

Leaders in the Communist Party have promised to raise the issue of Limonov’s arrest and the arrest of the other activists in the State Duma. According to National Bolshevik member Sergei Aksenov, Communist Party leader Vladimir Kashin felt that “if this is how things continue from now on, then after a couple of years the Communist Party could also end up without our traditional processions on November 7, and our position on the freedom of speech and assembly must be asserted.”

On Wednesday, Limonov’s ten-day sentence was held up in court on appeal. Prominent human rights activist Lyudmila Alexeyeva blamed the decision on a growing trend of corrupt police commanders forcing officers to give false testimony in court.

The October 31 protest during which Limonov was arrested along with approximately 70 other oppositionists was part of the Other Russia coalition’s “Strategy 31″ movement, in which opposition leaders file applications to rally on Triumfalnaya Square every month with a 31st day, in reference to the 31st article of the Constitution guaranteeing freedom of assembly.

A full scan of the police memo and a corresponding transcription can be found on Ilya Yashin’s blog (in Russian).”

Well, Limonov is an extremist, and the “National Bolsheviks” (in fact, neo-Nazis who also like Stalin) have an ideology that is a lot more xenophobic and imperialistic than either the Communists or the Putinists. And that is the major problem with the Other Russia, that it includes a lot of extremists on both the left and right, including people who make Putin look like a liberal. So while I see the argument about freedom of speech, I don’t think we need to waste our breath on people like Limonov, having in mind that there are a lot of more serious human rights violations going on in Russia.

November 20, 2009
MOSCOW (Reuters) — Russia has the world’s most fraudulent economy and attempts to stamp out white-collar crime have done little to stop its spread during the global financial downturn, PricewaterhouseCoopers (PwC) said in a survey.

Seventy-one percent of Russian respondents to PwC’s global economic crime survey said they had been subject to economic crime in the past year, more than in next-ranked South Africa, Kenya, Canada, and Mexico.

Russian fraud was 12 percentage points above its previous showing in 2007, PwC said, and was well above the global average of 30 percent, the Central and Eastern European average of 34 percent and BRIC countries’ 34 percent.

Russian President Dmitry Medvedev has repeatedly vowed to stamp out corruption since taking office last year, but such efforts have had little impact in a country where corruption is a way of life for millions.

More than half of Russian respondents to the survey, published on November 19, said anticrime measures were inefficient and that no industry in particular had been spared.

“It highlights just how much work Russia needs to do to improve its investment image,” said Chris Weafer, chief strategist at Uralsib brokerage. “Not so much of a long road to walk as a steep cliff to climb.”

The PwC report follows the annual publication of the Corruption Index by Transparency International, which ranked Russia, one of the world’s largest economies, at 146th-most-corrupt country on a par with Kenya and Ecuador.

PwC listed South Africa as the world’s second-most fraudulent country, with a 62 percent response rate to the crime question, followed by Kenya with 57 percent, Canada with 56 percent, Mexico with 51 percent, and Ukraine with 45 percent.

The percentage of Canadian firms saying they were victims of fraud rose to its highest in six years.

Economic Downturn

PwC said the global economic downturn had significantly affected most organizations, where asset misappropriation, corruption, and bribery were the most common types of fraud.

Sixty-two percent of respondents reported a decline in financial performance over the last 12 months and 40 percent of all respondents said the risk of economic crime had risen due to the recession.

The situation in Russia looks set to get worse, PwC said.

“Economic crime is and will remain a very serious risk for Russian organizations,” its report said.

“The economic downturn is changing the nature and scale of the fraud and integrity risks that organizations face. The speed of change is such that opportunities to commit fraud will be prevalent.

“More people will feel real pressure to ‘cross the line’ or look the other way while others do so.”

Japan, Hong Kong, Turkey, and the Netherlands featured as the territories that reported the lowest levels of fraud with 9.6 percent, 13 percent, 15 percent and 15 percent respectively.

PwC said over 3,000 respondents from 54 countries participated in its survey.

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